Foothill Ranch-based Wet Seal Inc. has agreed to a $7.5 million settlement to end an employment discrimination case that claims the retailer denied promotions, denied pay increases or terminated managers from its stores based on the color of their skin. The lawsuit was filed last summer by three managers of Wet Seal stores in Pennsylvania.
The Equal Employment Opportunity Commission (EEOC) determined late last year that Wet Seal executives had openly promoted a white-only brand image for their stores. They referred to it as the "Armani look" and claimed it was imperative to the success of their brand. Needless to say, this resulted in discrimination based on race for those who did not fit the Armani white skin, blonde hair and blue eyes look that executives were after.
The lawsuit was filed as a class-action on behalf of similarly situated African American managers at Wet Seal who were unfairly denied promotions or targeted for termination because of their race. Class representative Nicole Cogdell was a manager at the eighth highest-performing store of over 500 locations in the United States and Puerto Rico when a visit by an executive derailed her career.
The executive's comments noted that Nicole was "[N]ot right for this store," despite the store's success and Cogdell only having been in a management position for a month. Cogdell was transferred to another store before she filed a race-based employment discrimination complaint with the EEOC and quit her job with the company.
Wet Seal has since completely overhauled its Board of Directors, hired a new CEO and will create a Diversity and Inclusion Council to ensure that its policies are compliant with a race-neutral workplace. A majority of the settlement funds, at least $5.58 million, will be distributed to class members involved in the lawsuit.
Source: San Bernardino Sun, "Wet Seal to pay $7.5m in discrimination lawsuit," May 10, 2013